Keppel DC (AJBU) H1 2025 earnings summary

Executive summary

• Distributable income for H1 2025 surged 57.2% year-over-year to SGD 127.1 million, with DPU up 12.8% to 5.133 cents, driven by strategic acquisitions, strong portfolio performance, and major contract renewals despite an enlarged unit base.

• Portfolio optimization included accretive acquisitions in Japan and Singapore, divestments such as Kelsterbach Data Centre, and ongoing acquisition plans in Asia and Europe.

• Aggregate leverage improved to 30.0% as of 30 June 2025, with debt headroom of $898 million and a weighted average lease expiry of 6.9 years.

• Portfolio occupancy stood at 95.8%-96%, with a major contract renewal in Q2 2025 driving portfolio reversion of approximately 51%.

• The REIT is actively managing renewals, backfilling vacancies, and pursuing land lease extensions and acquisitions to enhance long-term value.

Financial highlights

• Gross revenue for H1 2025 was $211.3 million, up 34.4% year-over-year; net property income rose 37.8% to $182.8 million.

• Declared DPU for H1 2025 is SGD 0.05133, payable on 15 September 2025.

• Finance income increased 45.7% to $8.0 million, while finance costs decreased 5.3% to $24.5 million.

• Net asset value per unit increased to $1.58 from $1.53 at end-2024.

• Annualised distribution yield was 4.41% based on the closing price as of 30 June 2025.

Outlook and guidance

• Data centre industry expected to see robust growth, with global demand projected to grow at a 19–22% CAGR through 2030, driven by AI and digitalisation.

• Low aggregate leverage (30%) and declining cost of debt (2.9%-3%) position the REIT for future growth.

• Only 2.6% of contracts by rental income remain to be renewed in H2 2025; robust reversions expected to continue, especially in Singapore and Dublin.

• Ongoing focus on high-quality, accretive acquisitions, asset enhancement, and proactive portfolio management.

• Macroeconomic uncertainty persists, with the World Bank projecting 2.3% global growth in 2025.